Market swings shock investors, feed traders

Volatility reigns, provides fuel for trading profits

Stocks tanked on Thursday, taking 401(k) balances, brokerage accounts and individual retirement accounts with them. However, the same volatility that caused so much havoc in long-term investor portfolios created the type of opportunity that short-term traders rely on for profit.

The volatility during the big sell-off – the biggest in nine months – was reflected in the Volatility index, or Vix. Based on the implied volatility of options listed on the Chicago Board Options Exchange, the Vix jumped a whopping 21% to 26.08.